G.R. No. 159687 April 24, 2009
GULF AIR, JASSIM HINDRI ABDULLA and RESTY AREVALO, Petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and ROBERTO J.C. REYES, Respondents.

FACTS

Roberto J.C. Reyes had been employed as Airport Manager for Gulf Air for around ten years when he was dismissed on October 10, 1992 for serious misconduct and breach of trust and confidence. The dismissal arose from two incidents: (1) his authorization of free hotel accommodation for Mr. Andy Queroz via a Meal Accommodation Transport Order (MATO) on May 8, 1992; and (2) his instruction to accept, on a free-of-charge (FOC) basis, an Astro Airline ticket for Queroz’s travel on Gulf Air Flight GF 155 on May 10, 1992, despite Astro Airline having no interline agreement with Gulf Air. Gulf Air’s Manual of Authority required prior authorization for accepting FOC tickets from other airlines. Reyes claimed he acted to accommodate a request from Philippine Civil Aeronautics Board Executive Director Silvestre Pascual to assist Queroz, and that this was within his public relations duties. Gulf Air contended Reyes failed to coordinate with higher management as required and had attempted to cover up the incident. The Labor Arbiter found the dismissal valid. The NLRC reversed, finding the dismissal illegal and awarding separation pay, backwages, moral and exemplary damages, and attorney’s fees. The Court of Appeals modified the NLRC decision by deleting the awards for moral and exemplary damages and attorney’s fees, but affirmed the finding of illegal dismissal and the awards of separation pay and backwages.

ISSUE

Whether Roberto J.C. Reyes committed willful breach of trust justifying his dismissal from employment.

RULING

The Supreme Court ruled that Reyes did not commit willful breach of trust. The Court found that Gulf Air failed to prove that Reyes’s act of accepting the Astro Airline ticket and granting the MATO was a willful breach of trust constituting a valid cause for dismissal. The evidence showed that Reyes, as Airport Manager, had previously been allowed to grant similar accommodations without prior approval, as in the case of Mr. Sheikh M. Alkhalifa. Gulf Air did not present evidence of a new policy requiring prior authorization for such acts. The Court also found that the alleged cover-up, based on a disputed memorandum, was not sufficiently proven, especially in light of an NBI report questioning the authenticity of Reyes’s signature on the document. Furthermore, a prior warning issued to Reyes in 1989 pertained to a different matter (handling of accounting documents) and was not relevant. As a managerial employee, Reyes was subject to loss of trust and confidence as a ground for dismissal, but such loss must be based on willful breach, not mere error in judgment. The Court found no substantial evidence of a willful breach. Therefore, the dismissal was illegal. The Supreme Court affirmed the Court of Appeals decision, which upheld the NLRC’s award of separation pay and backwages but deleted the awards for moral and exemplary damages and attorney’s fees.